More Goldbug Idiocy: Washington State

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More Goldbug Idiocy: Washington State

Post by UnderAGreySky »

Washington Lawmakers Introduce Bill Claiming The Dollar Is Unconstitutional
ThinkProgress wrote:Washington state Reps. Matt Shea (R), Cary Condotta (R), Jason Overstreet (R) and Jim McCune (R) apparently believe that the U.S. dollar itself is unconstitutional because it is not gold or silver. Worse, if a bill they introduced late last week should become law, this strange vision of the Constitution would be written directly into their state’s law. According to their bill,
Only gold and silver may be recognized as government legal tender under Article I, section 10 of the United States Constitution, which gives the states the power to enact gold and silver based legal tender laws, “no state shall . . .; make any Thing but gold and silver Coin a Tender in Payment of Debts.” . . . The general government has failed to abide by Article I, section 8 of the United States Constitution: “To coin Money, regulate the Value thereof and of foreign Coin, . . .” and provide market value for gold and silver coins for circulation as currency among the states.
ThinkProgress adds:
The Constitution gives Congress the power to mint such coins if it wants to. It also, however, permits the United States to “regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” Creating a national currency that can be used for all commercial transactions throughout the United States easily fits within this power. The Supreme Court also upheld America’s power to use a paper currency as recently as the 1800s, although it relied upon somewhat more complex reasoning.
You'd think that all other problems in the world have been solved, for them to try this nuttery. Not that it has every stopped them.
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Re: More Goldbug Idiocy: Washington State

Post by Sidewinder »

I think it's a sign of how the US education system EPIC FAILed, that these people don't realize the impact the Gold Standard will have on the economy. (Hint: it'll make the economy go down faster than a hooker offered $1000 per blowjob.)
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Re: More Goldbug Idiocy: Washington State

Post by Serafina »

"No state shall". That says it all. The federal government isn't a state. Reading comprehension FTW.

But really, given that the people who wrote this are also likely into "state rights above all, big government is bad", it's no surprise that they overlook this.
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Re: More Goldbug Idiocy: Washington State

Post by D.Turtle »

Frankly, there are tons and tons of crazy bills that get introduced at the state level. 99% of them never go anywhere and aren't expected to go anywhere, but are just done in order to be able to go to their supporters and tell them how they tried to pass their pet agenda.

As long as they don't go anywhere, this type of story isn't really newsworthy.
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Re: More Goldbug Idiocy: Washington State

Post by Alphawolf55 »

Wait if the Government has the power to regulate the value of money, how does that not support fiat currency? Isn't the whole point of gold that isn't value cannot be regulated because it has a hard value based on the minerals it's made by?
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Re: More Goldbug Idiocy: Washington State

Post by Alyrium Denryle »

Alphawolf55 wrote:Wait if the Government has the power to regulate the value of money, how does that not support fiat currency? Isn't the whole point of gold that isn't value cannot be regulated because it has a hard value based on the minerals it's made by?
Yes.

Of course, what these people do not understand is that Gold is a traded commodity now. Yeah, try having a stable currency with something that gets speculated. It would be like trying to have a currency backed by coffee prices. Fuck that.
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Re: More Goldbug Idiocy: Washington State

Post by Sea Skimmer »

US dollars are also a traded commodity as is any other fiat currency that's worth anything serious. That doesn't crash the dollar out of hand. The bigger problem with the gold standard is simply the lack of flexibility in the money supply. Anyway like has been said, a random stupid bill introduced in a state house is not exactly news.
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Re: More Goldbug Idiocy: Washington State

Post by Alyrium Denryle »

Sea Skimmer wrote:US dollars are also a traded commodity as is any other fiat currency that's worth anything serious. That doesn't crash the dollar out of hand. The bigger problem with the gold standard is simply the lack of flexibility in the money supply. Anyway like has been said, a random stupid bill introduced in a state house is not exactly news.
True, but the money supply is also regulated. I am not economist, but is strikes me that one can use monetary policy to deal with that issue, such that the price of the dollar tracks confidence in the national economy. As you mentioned, gold has a rather less flexible supply, and it is not mined as fast as wealth is created. You will end up with REALLY high demand for gold both for industrial applications, and for shoving into Fort Knox, and he currency will deflate. This will drive up speculation and...

Could someone be so kind as to let me know if that might set up a positive feedback loop. My Math Sense(tm) tells me that it might.
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Re: More Goldbug Idiocy: Washington State

Post by The Duchess of Zeon »

You do realize that Washington State has a supermajority of democrats in both houses so this won't even get a committee hearing, right?

That said, out in the rural areas up in the mountains we have some real concentrations of crazy; I know first hand as I was raised in one. Homeschooling, militia sympathizer, "God Guns and Gritz" bumper stickers, etc. But this is something I've noticed: Conservatives in highly liberal states tend to go completely unhinged with a persecution complex.
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Re: More Goldbug Idiocy: Washington State

Post by Plushie »

I'll repeat what I said elsewhere:

"The US dollar is un-Constitutional, but not because it's not gold or silver. It's un-Constitutional because Jefferson was right and Hamilton was wrong about the Bank. But, for the same reason Hamilton won the political game in his time, nothing will be done about it in ours. The three branches of the Federal government have long conspired to ignore the Constitution as adopted and I don't foresee that changing any time soon."
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Re: More Goldbug Idiocy: Washington State

Post by Winston Blake »

Plushie wrote:It's un-Constitutional because Jefferson was right and Hamilton was wrong about the Bank
Hmm, this is meaningless to me, and anyone else not versed in American history. Could you describe briefly what Jefferson and Hamilton actually favoured?
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Re: More Goldbug Idiocy: Washington State

Post by Vejut »

If I'm recalling my history right, Alexander Hamilton favored a central, national bank. Jefferson (and Jackson) opposed it. Don't see what that has to do with anything though, because Hamilton was actually involved with the constitution, as I recall, and Jefferson, at the time, was in France...
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Re: More Goldbug Idiocy: Washington State

Post by Plushie »

Winston Blake wrote:Hmm, this is meaningless to me, and anyone else not versed in American history. Could you describe briefly what Jefferson and Hamilton actually favoured?
When George Washington was first elected to the Presidency, he appointed Alexander Hamilton (an important figure in the nascent Federalist Party, and a noted nationalist) his Secretary of Treasury and Thomas Jefferson (an important figure in the nascent Democratic Party, and a noted republican) his Secretary of State. The proto-Federalists won large majorities in the House and Senate and Hamilton went about trying to implement the fiscal program of his party (rather, his faction within his party). One aspect of that program was the establishment of a national bank similar to the Bank of England (and monopoly banks in several of the states at the time), which wasn't a power explicitly mentioned in the US Constitution. Washington was curious about the Constitutionality of such a bank, so he asked Hamilton and Jefferson to submit opinions on the matter. Jefferson answered first, IIRC.

He argued that the 'Necessary and Proper' clause (Article I, Section 8, Clause 18 of the US Constitution) implied that the power to do so actually was granted by the US Constitution. This was, essentially, where the doctrine of implied powers was innovated. According to Hamilton, if a certain power was useful towards accomplishing an actually granted power, then the Necessary and Proper Clause implied that the former power was delegated as well. Since the Constitution grants to the US Government the powers to regulate commerce, to coin money, and to regulate it's value, a useful institution towards this end such as the Bank must be Constitutional.

Jefferson's argument had been that the word 'Necessary' actually implies (as it does in the formal logic educated men of the period would have been familiar with) something without which a power cannot have any effect. Essentially, powers without which the explicitly granted power would be null and void. The important difference comes in when you examine the difference between this and useful: A useful power is sufficient to an end -- its presence establishes a condition -- but not always necessary. There might be another way of establishing the condition, or the power might be an ancillary part of its establishment, or it might be only necessary to establishing the condition in accordance with some specific sub-condition.

Jefferson also mentions as a side-comment the, to me, far more important argument against the Constitutionality of the Bank: That such a thing was actually discussed at the Philadelphia convention and explicitly voted down.

I made a post a while ago built around a reductio ad absurdum of Hamilton's argument by essentially directly quoting the minutes of the Philadelphia Convention proving that the actual Framers of the Constitution denied the US Government the powers of incorporation and printing paper money. My reductio was that, if the Necessary and Proper Clause could imply the granting of powers that were explicitly denied to the Government by the Framers of that same clause, then there's essentially no limit to what the Necessary and Proper Clause can grant in terms of powers. The US Congress could pass a law calling for the execution of an innocent person as long as it could tie the deed to the pursuit of some other, explicit power, and Hamilton's argument could stand for it just as well as it did for the establishment of the Bank.

I could post the post here, if you like, I did save it.

Anyway, Hamilton's argument won in the end, not because it was sounder (it wasn't), but because Washington himself was a nationalist, and thus actually agreed with Hamilton about expanding the powers of the US Government, and because Hamilton was his pet appointee. Both him and Hamilton had served together and Hamilton had actually been his aide-de-camp (IIRC) during the Revolution. He trusted his judgment more or less without question. Moreover, Jefferson had no military history and had actually fled from Richmond at the approach of a British army. Washington, like many military men in history, had a thing about people he perceived as cowards: He didn't like them or trust them. That Jefferson had been against the ratification of the Constitution initially (he was one of the men who had held out until a Bill of Rights was promised) and was a republican/true federalist didn't help things.

So, yeah. Politics won over Law and have been pretty consistently for most of our history. The Constitution as it exists is flawed, not in the sense that it doesn't grant the Government enough power, or that it grants too much, but rather that it made it too easy for powerful men near the center to circumvent it more or less entirely. It was designed to prevent one man or one faction from capturing the entire government and, on the latter goal, it has comprehensively failed. It began failing immediately after adoption, although it has obviously become much, much worse since then. Nowadays the Government can ignore it pretty much completely where there isn't a large, well-funded, powerful constituency for a particular clause of section, like with the First and Second amendments.
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Re: More Goldbug Idiocy: Washington State

Post by Plushie »

Vejut wrote:If I'm recalling my history right, Alexander Hamilton favored a central, national bank. Jefferson (and Jackson) opposed it. Don't see what that has to do with anything though, because Hamilton was actually involved with the constitution, as I recall, and Jefferson, at the time, was in France...
Indeed he was at the Philadelphia Convention.

And his ideas were rejected wholesale. I don't remember when, but at some point he stopped attending for large swathes of time because people had pretty much stopped listening to him.

Jefferson may have been away at the time, but he was kept up to date on proceedings (with allowances for trans-Atlantic information transmission speeds of the era) and also happened to be a lawyer, so he was familiar with how reading legal documents worked. James Madison, the guy who actually wrote the Constitution, happened to agree with Jefferson.

Of course, both changed their minds in their old age, but a lifetime spent in government will corrupt anyone.
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Re: More Goldbug Idiocy: Washington State

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The Duchess of Zeon wrote:You do realize that Washington State has a supermajority of democrats in both houses so this won't even get a committee hearing, right?
Sorry, Duchess, I did not know that. I'm not from the US, and my only knowledge of WA comes from my sis who lives in Seattle. So I'm glad this won't get anywhere, but I'm still concerned such people are actually allowed anywhere near posts of power.
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Re: More Goldbug Idiocy: Washington State

Post by Simon_Jester »

Plushie, the explanation for all this couldn't just be, say, that Jefferson's ideas about what the US ought to be were wrong?

His model of an agrarian republic of small farmers with a weak central government never made any damn sense.

It didn't match up with the power structure of any state of the union at the time, including his own, because in each state government the dominating authority was either the plantation aristocracy or the 'merchant prince' aristocracy. So having a relatively weak and extremely circumscribed central government wouldn't be even slightly helpful with the goal, even though Jefferson wanted it.

It didn't match up with the goal of making the US "free," because big aggregations of small farmers don't have a great history of being able to outcompete anyone else. The US's ability to defend itself against foreign aggressors depended on federal troops, its ability to build up economic machinery to create a 'First World' standard of living during the 19th and 20th centuries depended on the kind of infrastructure-building and regulation that is far more practical in a Federalist mindset than a Jeffersonian one.

It certainly didn't match up with what I'd hope would be the foremost goal of anyone trying to design a political system for America: that it survive the Industrial Revolution, and also the inevitable clash over slavery. Jefferson's agrarianism had no way of weaning the economy off slavery. A weaker central government would have precipitated a breakup over slavery sooner and been more likely to make it a permanent one, too. Even if it didn't, Jeffersonianism can't grow, it reflects a static snapshot of social and technological evolution; there's no room in there for people's way of life to improve without undermining the basic premises of the system (which is that the average citizen is a prosperous small farmer, not a factory worker or a clerk or anything of the sort).

If we'd tried to stick to a truly 'Jeffersonian' vision of America, the US would have been about as politically successful as the Boer Republics- whose main achievements were that they lasted long enough to build up a nice solid tradition of segregation and picking pointless fights with the British Empire.

So Jefferson doesn't get Magic Founder-Ideal Points for having thought the US should be an agrarian republic with a confederation-style government. I'd argue that he was just flat wrong about whether that was practical or desirable. Hamilton was flat wrong about a bunch of issues too, but at least his idea of government was remotely workable. If Jefferson had won out, all it would mean is that eventually the US or the two or three successor states it broke up into would have to sit down and totally rewrite their constitutions, just like the US had to rewrite the Articles of Confederation.
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Re: More Goldbug Idiocy: Washington State

Post by Technocrat »

Jefferson was wrong, yes. He did not fully understand the Constitution, because he had virtually nothing to do with it. Jefferson was off in France playing diplomat. His argument was less legal and factual and more based on his personal feelings toward Hamilton in particular, whom he views as the leader of a cabal of conspirators out to "destroy the republic." Which was ridiculous and amusing, but had little to do with the legality.

The irony is that Hamilton's argument was actually James Madison's argument--the same guy who wrote the Constitution by and large. Hamilton stole Madison's words from the Federalist Papers for using the Elastic CLause to defend the Bank of the United States. Madison of course was embarrassed, because he at the time changed his mind and wanted to pretend he never said anything about it. But that is why the bank passed. He made a convincing argument, made "more convincing" at the time by using the words of the guy who wrote the document they were trying to interpret.
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Re: More Goldbug Idiocy: Washington State

Post by Simon_Jester »

In fairness, Jefferson was not "playing" diplomat.

Disputes over the interpretation of the Elastic Clause are real and legitimate- you can make arguments for or against a lot of things being interpreted as constitutional. This is one of the reasons I'm not such a big fan of enumerated powers in the first place- it makes it very difficult for the government to do anything whose need was not foreseen when it was created.
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Re: More Goldbug Idiocy: Washington State

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One aspect of that program was the establishment of a national bank similar to the Bank of England (and monopoly banks in several of the states at the time)
The bank of england was one of the reasons the british empire was as successful as it was. A central bank that can guarantee loans issued to a state (by purchasing the debt) massively lowers the interest rate that state would be charged, and the increase the ease at which they could get loans. Building ships and raising soldiers takes a LOT of money, and when large portions of your economy was still barter, and your money-strapped continental congress could not afford to pay, or even feed and equip the army used to fight off the british during your war of independence, you want low interest rates and easy loan money. The british had this. Most other states at the time did not, because they were still relying on a largely medieval banking system of small private lenders, and states without a central bank were far more prone to simply not paying back loans, they ended up with truly epic interest rates. This permitted the english to outspend them on wars, and expand their empire to the point that the sun was always up on some portion of it. It is why a little island could hire fucktons of german mercenaries, and raise thousands of british troops to come across the pond and swamp a fledgling nation with a much bigger population for Years--while also fighting wars with the Maratha Empire, the Dutch, the Mysore Sultanate, AND dedicate sufficient naval assets to keep the french from assisting us to the degree they would like.

That takes money. Fighting that off takes money. Money that without central banking we simply would not have. Thus, central banking was Necessary and Proper, both in terms of coining money and regulating its value, and raising a god damn army and navy, and maintaining it in times of war. In fact, when we declared war on england in 1812, and the british bothered to actually invade in 1814, the resulting conflict brought our national debt from 45 million to over 100 million USD. At the time, the federal budget was on the order of 8.6 million USD per year, without a war on.

Do the math.
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Re: More Goldbug Idiocy: Washington State

Post by Winston Blake »

Plushie wrote:I could post the post here, if you like, I did save it.
No I think I get the gist of it now.
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Re: More Goldbug Idiocy: Washington State

Post by Plushie »

For most of you: You guys all know you're making utilitarian arguments in response to a legal one, right? You're essentially ignoring the point I was trying to make in favor of expounding on how useful national banks (which aren't actually the same thing as central banks) are to the establishment and maintenance of empires (which I also don't agree is necessarily that good a thing to tout as a benefit of a system of public finance).
Technocrat wrote:Jefferson was wrong, yes. He did not fully understand the Constitution, because he had virtually nothing to do with it. Jefferson was off in France playing diplomat. His argument was less legal and factual and more based on his personal feelings toward Hamilton in particular, whom he views as the leader of a cabal of conspirators out to "destroy the republic." Which was ridiculous and amusing, but had little to do with the legality.

The irony is that Hamilton's argument was actually James Madison's argument--the same guy who wrote the Constitution by and large. Hamilton stole Madison's words from the Federalist Papers for using the Elastic CLause to defend the Bank of the United States. Madison of course was embarrassed, because he at the time changed his mind and wanted to pretend he never said anything about it. But that is why the bank passed. He made a convincing argument, made "more convincing" at the time by using the words of the guy who wrote the document they were trying to interpret.
This really only addresses Jefferson main argument (and, I think, not in completeness -- the distinction between powers useful to a delegated end and necessary to it is important and can't just be brushed off -- Hamilton did not make Madison's argument, but instead a kind of mutation of his argument), and leaves my point completely unaddressed: That using the Necessary and Proper clause to argue that the Federal government has the power to incorporate a bank with the authority to print money on Congress' behalf essentially means the Necessary and Proper clause grants to the Federal government any power whatsoever it should decide it wants to use to accomplish an enumerated power, since incorporation and the printing of paper money were two things explicitly discussed at the Philadelphia Convention and specifically voted down there. If powers the Framers themselves explicitly, specifically decided the Constitution would not grant to the Federal government can nevertheless be found in the Necessary and Proper clause, then really any power at all can be.
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Re: More Goldbug Idiocy: Washington State

Post by The Duchess of Zeon »

As long as it's in regard to an enumerated power. You really need to include that caveat when making such sweeping statements.
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Re: More Goldbug Idiocy: Washington State

Post by Terralthra »

If the point about the Framers not wanting Congress to be able to make a central bank is true, why isn't it mentioned? Sure, they voted it down as an explicit power, but there's also Article I Section 9, which makes a list of things the Framers were very clear they did not want the Federal Legislature to do, and "central/national bank" isn't anywhere on the list.
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Re: More Goldbug Idiocy: Washington State

Post by Simon_Jester »

To me, that sounds more like they couldn't agree on whether or not to have a central bank. Which is no surprise, this was 1787 and a lot of things that were incredibly obvious 100 or 200 years later weren't known at the time.

Give the federal government an enumerated power to form a central bank and you guarantee that it will have one, which many of the founders would oppose. Forbit the federal government from having one and likewise, many would oppose that. So better to leave the issue aside for future generations, which is exactly what they did and it worked well enough. The things wrong with our system now aren't because we have a central bank, it's because the central bank and its associated regulatory organs have become corrupted.
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Re: More Goldbug Idiocy: Washington State

Post by Sea Skimmer »

Its just mythical to claim the framers truly agreed on anything more then the text of the constitution was better then the text of the articles of confederation, and even that level of agreement only lasted until the US civil war. They disagreed on just about everything; what was important was they were smart enough to realize that it was OKAY to have disputes and that the system created would provide a means to work them out in a legal fashion. Too bad the republican nut jobs have completely thrown this idea out the window.
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